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Friday, May 27, 2005

West Java govt to offer $16b worth of projects

Source: The Jakarta Post

Zakki P. Hakim, The Jakarta Post, Jakarta

Although the recent Indonesian Infrastructure Summit has yet to bear significant results, the West Java administration is set to hold a similar summit in August to offer some 50 infrastructure projects worth a staggering Rp 150 trillion (US$15.8 billion).

West Java governor Danny Setiawan said his province actually needed at least Rp 200 trillion of investment in infrastructure for its economy to grow by 8 percent in the next five years from the current rate of around 5 percent.

West Java, home of 39.14 million people, has now 2.4 million people unemployed and 10 million living under the poverty line.

The province had abundant business opportunities in the areas of agriculture, marine industries, tourism, manufacturing, trade and services and human resources, but he said lack of infrastructure was discouraging investment in these sectors.

Therefore, the West Java Infrastructure Summit, to be held in Bandung on Aug. 18-19, would offer projects in sectors such as toll roads, power, airports, seaports, water supply and waste management.

Aside from holding the summit, the governor would also undertake a road show promoting the projects to China and European Union member countries in July.

The projects include building an international airport in Kalijati subdistrict in Majalengka regency -- about three hours drive south of the province's capital city of Bandung-- and a marine harbor in Majalengka's neighboring town of Cirebon.

The Summit would also offer a tap water supply project in Bandung regency worth Rp 100 billion with a rate of return of 21 percent, as well as similar other water treatment projects in other locations within the province with an average return of 20 percent.

The governor also said that the province suffered from a shortage of electricity, having its power supplied from Paiton Energy in East Java. "We need alternative power supplies in the province, be it be sourced from coal, water or geothermal," he said.

He, however, could not give a clear answer on why the province needed to hold a separate event from the series of summits the central government conducted.

The central government held the first infrastructure summit in January offering 91 infrastructure projects worth $22.5 billion that spanned the archipelago. The government is slated to hold another summit offering a second batch of projects worth $57.5 billion.

Although the January event was relatively successful in promoting Indonesia and the projects, foreign investors were still somewhat reluctant to actually take up the offers.

The general attitude of the participants was that they would wait and see when the government would fulfill its promise to enact 11 government regulations and three presidential decrees as the legal basis for the projects.

Danny said he had pledged together with regents and majors in the provinces to do their best in facilitating investment in West Java.

For a start, he vowed that he would slash the time needed to start a business in the province from 154 days at present, to only 30 days in accordance with the central government's target.